Reduced acreage and supplies predicted for U.S. vegetables

The outlook for fresh vegetables this winter indicates reduced acreage and supplies, according to the latest USDA Vegetables and Melons Outlook Report.

At the same time, demand is expected to be soft as consumers remain conservative with regards to eating out and purchasing premium products such as hothouse and organic vegetables.

Although the winter price outlook is uncertain (given average weather), it favors steady to slightly higher prices compared with the relatively modest levels experienced a year earlier. As a result, growers and shippers may face a cost-price squeeze, with input prices this winter still relatively high, especially for fertilizer, chemicals, land rent and seed.

During the fourth quarter of 2008, fresh-market vegetable prices at the point of first sale (largely the shipping point) have generally been running above the relatively strong levels of a year earlier. A weak economy and rising unemployment have reportedly slowed traffic within the foodservice sector, but weaker demand has been more than offset by weather-reduced shipments, helping to maintain price strength.

Fresh vegetable prices were pushed higher as shipments were reduced in November by a combination of lower fall-season acreage, delayed planting caused by heavy late summer and early fall rains, cool weather in the desert Southwest, which delayed the start of harvest in November by about a week, and cold fall weather in the Southeast, which damaged some crops and slowed growth of others.

Yields were cut for crops such as squash, cucumbers, tomatoes and bell peppers.

The volume of fresh vegetable and melon market shipments declined 12 percent from a year earlier in November and follows a 4-percent decline in October. Shipping-point prices are expected to average 5 to 10 percent above a year earlier during the fourth quarter — led by higher prices for bulb onions, carrots, cucumbers and sweet corn. Prices are expected to average below a year-earlier for tomatoes, cantaloupes and snap beans. The market situation during November 2008 for a few of the leading fresh-market vegetable crops compared with a year earlier was as follows:

Carrots

• Shipment volume (91 percent domestic) was down 21 percent from a year ago.

• Prices at the point of first sale (largely grower or f.o.b. shipping point) averaged 24.6 cents per pound — up 56 percent from a year earlier.

• Market News retail prices for baby carrots averaged $1.41 per pound (up 1 percent from a year earlier), with organic selling for $1.80 per pound.

• January-October import volume was up 10 percent from a year earlier.

• Per capita use is forecast to be 8.6 pounds in 2008, down 4 percent from 2007.

Celery

• Shipment volume (99 percent domestic) was down 8 percent from a year earlier.

• Prices at the point of first sale (largely grower or f.o.b. shipping point) averaged 17.7 cents per pound — down 5 percent from a year earlier.